The Jobs and Premium Protection Act will overturn Obama tax, save jobs & block rising premiums.
WASHINGTON, D.C. – Today, U.S. Senators John Barrasso (R-WY) and Orrin Hatch (R-UT) are introducing legislation to save jobs and prevent health insurance premiums from skyrocketing for America’s small businesses and families. The Jobs and Premium Protection Act, repeals the costly, job-crushing health insurance tax (HIT) included in the President’s health care law.
“Our legislation repeals President Obama’s unfair, hidden tax on America’s job creators, and will save thousands of jobs across the country,” said Barrasso. “With 9 percent unemployment, hardworking Americans cannot afford to be hit hard by even higher premiums. We need to stop the HIT on our economy now – before it starts. This tax is just another example of how the President’s trillion dollar health spending law is only making things worse for small businesses and their workers.”
“Chock full of tax hikes, mandates and government overreach, the President’s $2.6 trillion health spending law is an anchor around our economy’s neck,” said Hatch. “The health law’s insurance tax is especially damaging, undercutting our economic recovery by increasing the cost of health coverage. Money that could go to higher wages, new workers, or investment will instead go to pay this new tax. With insurance premiums already skyrocketing and unemployment hovering at 9 percent, this tax makes no sense. The President is demanding jobs legislation; he should start by supporting the repeal of this tax.”
BACKGROUND
The Jobs and Premium Protection Act repeals Section 9010 of the President’s health care law, known as the health insurance tax (HIT).
If the HIT is not repealed, starting in 2014, health insurance companies will be taxed based on their net premiums written in the fully-insured market.
• 87 % of small businesses purchase their insurance in this fully-insured market, and it is the place the self-employed and uninsured go to when they purchase insurance.
• The HIT will impose $87 billion in costs on businesses and their employees in the first ten years, diverting revenue that could be used for higher wages, new hires, and capital investment.
• Over the second ten years, this cost to businesses and their employees will be $208 billion.
Ultimately, the cost of this tax will be passed through to American workers. They will pay the tax in the form of lower wages or higher premium contributions.
According to a study released by former CBO Director, Douglas Holtz-Eakin, the average employee with a family plan will see their take-home pay reduced by $5,000 over the next decade due to this tax.
The Joint Committee on Taxation wrote in a letter to Senator Jon Kyl (R-AZ) confirming that eliminating the HIT would decrease the average family premium in 2016 by $350 to $400.
A recent NFIB study estimates that this tax will force the private sector to shed between 125,000 and 249,000 jobs between now and 2021—with more than half of those losses falling on the backs of small businesses.
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